Turned down and told to reapply?? How does that help?

(Roseville, CA USA)

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Turned down and told to reapply?? How does that help?

After 3 months of continually submitting the requested documents (some of which were sent 3 times), we were notified that we do not quality for mortgage modification because we had too much in cash reserves.

The problem is Chase looked at bank statements that were 4 months old and those cash reserves are now gone. Not to mention, the only reason we had cash reserves is because we took a 401K loan so we would not default on the mortgage. When we told Chase that, they said to reapply.

This does not make any sense. Why would we reapply when we have a modification specialist looking at our case already. Why can we not just send a current statement to show that the money is now gone. They have all the documents the have requested. They just need an updated bank statement. I told Chase that we would have to start missing payments if the process of review takes as long as the first time. They suggested that I don't miss payments. When I asked how I am supposed to do that with no money, they said I could look at a short sale, forbearance application or reapply.

We spoke to the forbearance department who said we do not qualify because we haven't missed payment. One department says to miss payments while the other says not to. I feel like we are going around and around in circles! Now what should I do?

Our loan is not owned by Fannie or Freddie and is not a FHA loan. Our income has been reduced by 2/3s. We moved into our California rental home from Washington in order to be employed and cannot sell our house in Washington. We are prepared to do a deed in lieu of foreclosure on that house if the bank won't work for us. That loan is with Wells Fargo and we have just started negotiations with them.

As of right now, the mortgages on both houses takes up 96% of our gross. Should we walk away from both houses now? I don't see any options left.

Chase Mortgage Loan Modification Answer:

by Chase Mortgage Loan Modification Expert - Dan North

The Chase run around is a stupid waste but you have not exhausted your options yet. Despite how frustrating Chase Bank can be even when your proposal is in their best interest, they can be handled.

At 96% of your gross income you will not be able to pay both mortgages unless rental income is enough to service the mortgage on the income property and you bring the mortgage down to 31% of your gross income on your primary residence.